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Corporate Social Responsibility: Profitable Ethics
During the last decade more and more public perceives commercial companies as unseparatable part of society rather than economic gods it used to be. As part of society, they share the same citizenship and therefore share the same responsibility as any other individual citizens. Just as Andre Nijhof put it: “The classic divide between the state and the market is fading. Increasingly, companies are being held accountable for issues such as fair trade, environmental degradation, and the social economic situation in a region. Companies are asked to expand their corporate agenda.” This agenda expansion is no other than influence of stakeholders on the actual operations of the company in various levels. They brought societal issues and expectations to the board meetings and company responds by developing a social identity. This social identity is what Corporate Social Responsibility (CSR) is trying to shape.

What is CSR?

Although CSR is too broad to be given one precise definition, let me give you one to make sure we’re on the same page. CSR is a commitment to behave ethically and contribute to social, ecological, and economic issues. This makes implementing CSR is much more than stating in annual report your company has built community centers and give away scholarships – although such causes are also praiseworthy. Nevertheless, companies should do everything within their power to enable and promote CSR by all means.

When you implement CSR it means you address economic, social, and ecological issues in the daily strategies, policies, and operations of your company. Take UK energy supplier npower for example. They formed an alliance tekstwith Greenpeace to provide a pioneering ‘clean’ and renewable electricity product named Juice, as a practical solution to help tackle global warming.

This kind of sustainable investments is not only generate good reputation among attentive stakeholders but also proves to be another potential facet for profit.		 Triple Bottom Line of CSR:

People
The social dimension. This has a variety of aspects concerning the effects for human beings, inside and outside the organization.

Planet
The ecological dimension. This dimension relates to the effects on the natural environment.

Profit
The economic dimension. This dimension refers to the creation of value through the production of products and services and through the appreciation of consumers for company’s products and the efficiency with which factors of production are used.

CSR in Netherlands

In the Netherlands itself the issue of CSR gained increasing importance since mid 1990s motored by none other the Dutch Social and Economic Council (SER). It culminates when they published an advisory report called “Corporate Social Responsibility: A Dutch Approach” in December 2000. The report is a wake-up call for stakeholders (among them are governments and non-governmental organizations) to pay more attention to the issue and push companies towards value-added business attitude. Hence, contributing to society’s prosperity in longer term.

Value Added Business Attitude

By now you might ask, why should I bother with CSR? My company already gave a lot to the charity. Well, CSR is a free choice. Whether a company will implement CSR is really depends on the entrepreneur. But if you decide to implement CSR for whatever reason, whether to be a responsible company, good reputation, or simply to motivate the employees, the chance of your company’s survival has increased. From this perspective, CSR could generate trust among stakeholders as they hold companies and entrepreneurs accountable for sense of social responsibility. When these responsibilities are met, society allows the company to perform its core goal, gaining profit. Public acceptance and a good reputation are the important conditions to survive the eye of society’s watchdog, the NGOs.

Collaboration of Two

Non-governmental organizations (NGOs) in particular have decided to try different approach to overcome societal issues. Instead of attacking and boycotting companies, now NGOs cooperate with commercial companies to create social transformation.

The collaboration between NGO and commercial company is a win-win strategy based on exchange of resources. Commercial companies are important because of their financial resources, project management, technology, and networks while on the other hand, NGO possesses detailed expertise and seen as representation of public voice. It is believed that with this approach, overcoming societal issues can be much more effective and efficient.

Profitable Ethics

So in a way, CSR is a contemporary strategy designed to ensure that profit-driven nature of commercial company corresponds with the expectations of its social environment. It is designed and tailored to make sure that everybody gets what they want. The company gets the acknowledgement, the NGO gets means to execute its mission, and society gets better. What could be better than that?

Author: Intan Wibisono
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